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Spanish-Language Radio, TV Expected to Grow Faster Than General Market
December 18, 2006
By Kevin Downey
Local Spanish-language television and radio stations have a lot to look forward to next year and throughout the remainder of the decade. Advertising revenue will continue to pour into Spanish-language stations faster than it will flow into general-market stations, according to a forecast coming out next month from Monterey, Calif.-based Kagan Research, which on Friday previewed its findings exclusively with Marketing y Medios.
Kagan is forecasting ad revenue on TV stations targeting Latinos will grow 6.5 percent on a compounded annual basis through 2010. Revenue is expected to increase 5 percent in 2007, 8 percent in 2008, 4 percent in 2009 and 9 percent in 2010, when expenditures will surpass $1.9 billion.
Kagan senior analyst Deana Myers says a combination of factors is behind the upbeat outlook.
She explains that the surging buying power of Latinos is attracting advertisers. Kagan estimates that Hispanics' disposable income reached $800 billion this year and will surpass $1 trillion by the end of the decade.
"Advertisers are definitely going to spend more money in the Hispanic market as they realize the spending power is so huge," she says.
Myers also notes that most advertisers are well aware of the Latino population boom.
"The market has become really hot because it's the biggest minority group now, so advertisers are realizing it's a really important target. So, more advertisers are putting money into it."
Radio ad revenue is projected to grow an average 5.3 each year through 2010. Ad spending on Spanish-language stations is expected to grow 6 percent next year, far outpacing the forecasted 2 percent to 3 percent for the overall radio industry, and then 5 percent each year through the end of the decade.
Meanwhile, other analysts have recently speculated that the Spanish-language ad market will cool down in coming years as second- and third-generation Hispanics adopt English as their primary language. Myers factored this trend into her projections but also notes that a continuing influx of immigrants, coupled with bilingualism, ensures increased ad spending.
"On one hand, there is a movement toward English," she says. "But there is still a lot of growth in first-generation Hispanics. And even though there are second- and third-generation Hispanics speaking English in their everyday lives, a lot of times they speak Spanish at home and watch Spanish-language TV."
Myers also notes that Hispanics tend to listen to more radio than non-Hispanics and, at the same time, many advertisers are only now beginning to target Hispanics, providing fuel for future ad growth.
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